End of an era as FKP boss moves on

Last week marked the end of an extraordinary era for Rod Forrester when he retired as a director of leading property group FKP Limited.

Mr Forrester founded the firm, which started out developing small unit blocks, residential properties and commercial buildings on the Sunshine Coast, with his brother Des and Phil Parker in July 1987.

The following year FKP (formerly known as Forrester Kurts properties), was formed following the merger of Peter Kurts Properties Limited and Forrester Parker Group.

The company has subsequently grown to become one of Australia’s biggest property developers and is the biggest owner and operator of retirement villages in both Australia and New Zealand.

Mr Forrester served as managing director of FKP until 2003, overseeing the company’s listing on the ASX.

He said he was extremely proud of FKP’s achievements, but felt it was time to step aside to help his son Tim run Aria Property International, a family-owned business which has several projects planned for Mooloolaba and Cotton Tree, as well as residential and commercial projects in Brisbane and the US.

“I was getting concerned that what we’re doing at Aria might start crossing paths with FKP and there might be a conflict of interest,” Rod said.

“The board (of FKP) didn’t have a problem, but I just didn’t want that situation to happen.”

Aria has a 194-unit residential development planned for Brisbane’s southside, as well as apartment sites on Mooloolaba Esplanade, Douglas Street, Muraban Street and Meta Street (all in Mooloolaba), as well as King Street at Cotton Tree.

The company is also onto its fourth block of apartments at the Steamboat Springs ski resort in Colorado.

While Rod has stepped down from the board, he still has a very strong connection to FKP as a major shareholder of the company.

Unfortunately FKP was not spared from the fallout of the sub-prime mortgage crisis that began in the US last year.

The share prices of virtually all ASX-listed property developers and property trusts have been trashed, with FKP falling from a high of $7.59 last year to $2.38 earlier this year. It has since recovered to sit just below $5, thanks largely to a takeover offer last month from rival Lend Lease pitched at about $5 per share.

Rod said that was rejected by the board because it didn’t take into account either the underlying value of the company’s assets, or the development pipeline of projects which includes about 1000 residential lots at Peregian Ridges (adjoining FKP’s Peregian Springs development).

“We knocked it back ... but both managements are still talking. The board has to do what’s in the interests of shareholders,” he said.

While FKP’s assets such as its industrial estates in Melbourne and Sydney, the Norwest Business Park in Sydney, its property trusts and residential development pipeline would have appealed to Lend Lease, no doubt it was also extremely interested in FKP’s retirement village assets.

The company is not only number one in the sector in Australia and New Zealand, it also holds the number two position through a joint venture with Macquarie Group.

Rod said that strategy was started in 1989 when FKP bought the Cleveland Gardens Retirement Village in Brisbane.

“We could see the need for facilities like that as the ageing population created a demand for retirement living,” he said.

“We also saw it as a way to create a long-term recurring income source ... the retirement villages are now a very important part of the company’s profitability.”

With all the building blocks now in place at FKP, Rod said it was the right time to start spending more time helping his children with their careers.

“It’s been great helping build FKP into the company it is today. But it’s time for another challenge,” he said.

Besides that, Rod admitted he needed some spare time for skiing and working on the Balgownie Estates winery he runs with Des in regional Victoria.